5 Ways to Generate Retirement Income
Congratulations! After years of saving for retirement, you’re ready to retire and turn your savings into income. These five types of investments and products may be helpful in generating income for retirement.
If you are looking for a predictable stream of income, consider investing in individual bonds. Bonds generally pay a fixed rate of interest every six months. You can receive interest payments more frequently by selecting bonds that pay interest in different months.
Bond funds that hold a variety of bonds in a single fund can also be a good source of monthly income. Just be aware that the income payments will generally fluctuate in value due to changes in the mix of bonds held by the fund and differences in the bonds’ payment schedules.
2. Dividend-Paying Stocks
Many companies pay their stock-holders a cash dividend on a regular basis, making dividend-paying stocks and stock funds an option for investors seeking income, as well as the potential for long-term growth. Unlike the interest payments from most bonds, stock dividends will fluctuate in value and can be suspended by the company.
3. Real Estate Investment Trusts
Because real estate investment trusts are required to distribute at least 90% of their taxable income to their shareholders each year, they may at times pay higher dividends than other types of companies, making them an attractive option for investors seeking current income.
4. Retirement Income Funds
A retirement income fund with an allocation that is appropriate for you at this stage in your life is another option worth considering. These funds invest in a combination of bonds, stocks, and other securities with the goal of providing income and the potential for capital preservation or growth all in one fund.
5. Immediate Annuities
If you want a stream of income guaranteed to last your lifetime, an immediate annuity may be the way to go. An immediate annuity is a contract between you and an insurance company that guarantees you an income for life or a specified number of years in return for your lump sum premium payment. The guarantee is subject to the claims-paying ability of the issuing insurance company.
Questions about which option(s) might be best for you? Copper Leaf Financial can help. Copper Leaf develops a customized wealth management (financial) plan designed to integrate every aspect of your financial life. This is "true wealth management" - a holistic, all-encompassing approach that goes beyond just investment advice. Call us today at (802) 878-2731 to schedule a strategy session and begin building your road map to financial success.